E&A’s first-half profit jumps 86pc

E&A has recorded a net profit of $6 million for the nine months to March 31, 2013. This compares with the company’s full-year profit of $2.9 million in 2011-12.

The group generated a first-half profit of $4.1 million, representing an increase of 86 per cent compared with the previous corresponding period. Management said when it delivered the result that it expected a similar performance in the second half. This implies a fourth-quarter profit of about $2.2 million, which the company appears to be on track to achieve.

What made the performance for the first three quarters even more impressive was that this period included investment in premises and infrastructure in order to provide the facilities for contracts that have been awarded in the past 12 months.

One of the most significant contracts was for the supply and manufacture of 20 wind towers. This involved working collaboratively with a major player in that field in Siemens. After completing a $5 million upgrade at its Whyalla facilities the company is now in a position to deliver follow-up work in this area.

Should E&A meet its guidance, this would equate to earnings per share of 7.5¢. Based on its recent trading range this represents a price-earnings multiple of about 8.5.